Bitcoin (BTC) is taking a breather after Thursday's sharp rally that took prices back above a widely tracked technical line.
- On Thursday, bitcoin jumped almost 5% to levels above $10,750, confirming its biggest single-day gain since July 27, according to data source Coin Metrics.
- With the move, the cryptocurrency found acceptance above the 100-day moving average at $10,448, which was breached to the downside earlier this week.
- So far, however, the sharp recovery from weekly lows near $10,200 has failed to draw stronger buying pressure.
- At press time, bitcoin is trading near $10,680, representing a 1% decline from the high of $10,789 observed during Thursday's U.S. trading hours.
- The market has been a little lacking direction in recent weeks, with prices largely stuck in the $10,000 to $11,000 range since Sept. 4.
- John Ng Pangilinan, managing partner at Singapore-based Signum Capital, sees a bullish revival occurring above $11,000.
- "A stronger rally would materialize if prices rise above $11,000," Pangilinan told CoinDesk. "I would buy on a breakout above the psychological hurdle."
- The odds, however, may be stacked in favor of the bears, as dollar liquidity in international markets is beginning to tighten, as tweeted by macro analyst David Belle.
- As such, the dollar may extend recent gains against other currencies, putting downward pressure on the cryptocurrency.
- "A break below the early September low of $9,800 would open the doors to $8,000," Joel Kruger, a currency strategist at LMAX Digital, told CoinDesk.
- A big move may happen soon, as bitcoin's one-month implied volatility has declined to 44% – the lowest level in nearly two years, according to data source Skew.
- In the past, an implied volatility of 50% or less has paved the way for violent price action.
- Currently, implied volatility closing on the all-time low of 35% seen ahead of the mid-November 2018 crash.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.